Crisis-hit Tokyo Electric to cut top exec pay by half

Reuters Staff

3 Min Read

TOKYO (Reuters) - Tokyo Electric Power said it would cut the total remuneration of its president, chairman and other top executives by half as it grapples with the world’s worst nuclear crisis in 25 years.

The company, which is seeking government help to foot a massive bill to compensate local citizens and businesses surrounding the stricken Fukushima Daiichi plant, said it would also cut the annual salary of general staff by 20 percent.

A ruling Democratic Party lawmaker said the government will be sharing responsibility with the electric utility in compensating those affected by the earthquake and tsunami that ripped through the plant last month, causing radiation leaks and an evacuation of nearby residents.

“I believe the government cannot avoid bearing a certain responsibility in this issue, although it goes without saying Tokyo Electric is responsible as well,” Goshi Hosono, told a news conference, without elaborating.

Regarding a perceived delay in releasing reactor air into the atmosphere to ease high pressure built inside, Hosono said Tokyo Electric did not strike him as a company well prepared to make big decisions in a timely manner.

“Tokyo Electric is very accustomed to routine work such as supplying power, but my feeling was that something about its corporate culture might have made it difficult to make major decisions,” Hosono, also an aide to Prime Minister Naoto Kan, said.

He works as a secretary-general of joint headquarters set up by the government and the power firm to cope with the nuclear crisis.

Tokyo Electric’s wage reductions are part of a broader restructuring that is expected to include job cuts and asset sales, and could be announced as early as this week.

According to a company filing, the average total compensation of 19 internal directors was 37 million yen ($452,074) in the financial year ended in March 2010.

The crisis at Fukushima Daiichi has had a wide-ranging impact on the economy and financial markets.

Earlier on Monday, Dai-ichi Mutual Life Insurance said it would fall short of its net profit estimate for the year ended in March by 62 percent, hurt by a roughly $2 billion valuation loss on its massive share portfolio.

Dai-ichi is Tokyo Electric’s largest shareholder with a stake of about 4 percent.

While the insurer did not name the shares on which it suffered losses, a source with direct knowledge of the matter told Reuters its write-down on Tokyo Electric stock came to about 100 billion yen. The source asked not to be named because the information was not public.

Tokyo Electric’s shares have lost about three-quarters of their value since the disaster on March 11.